What is the basic purpose of insurance quizlet

What is the basic purpose of insurance quizlet

insurance

The purpose of insurance is to provide financial protection and security to individuals and businesses in the event of unforeseen events such as illness, accidents, natural disasters, and death. It is a means of spreading out risk and cost over a large pool of individuals, rather than requiring one person to bear the full burden of a potential loss.

Insurance can be divided into two main categories: personal insurance and business insurance. Personal insurance includes health insurance, life insurance, disability insurance, home insurance, and automobile insurance, among others. Business insurance includes liability insurance, property insurance, workers' compensation insurance, and others.

Health insurance

Health insurance provides coverage for medical expenses incurred as a result of illness or injury.It helps to protect individuals and families from the high costs of medical treatment and helps to ensure that they receive the care they need when they need it. Health insurance can also provide coverage for prescription and other medical services, such as physical therapy or rehabilitation.

life insurance 

The beneficiaries of life insurance are given money in the case of a person's passing.. It can help to pay for final expenses, such as funeral costs, and can provide a source of income for surviving family members. This type of insurance can also be used as an investment tool, with the cash value of a life insurance policy growing over time.

financial protection

Disability insurance provides financial protection in the event that an individual is unable to work due to a disability. It can help to replace lost income and can provide financial support for household expenses and other necessary costs.

Home insurance provides coverage for damages or losses incurred as a result of events such as theft, fire, and natural disasters. It can help to repair or replace damaged property, as well as provide financial support for temporary housing and other necessary expenses.

vehicles

Automobile insurance provides coverage for damages or losses incurred as a result of a car accident. It can help to pay for repairs or replacement of damaged vehicles, as well as provide financial support for medical expenses and other costs incurred as a result of the accident.

Business insurance 

Business insurance is designed to protect businesses from financial losses incurred as a result of various events. Liability insurance provides coverage for costs associated with lawsuits and other legal expenses, while property insurance provides coverage for damages or losses to a business's physical property. Workers' compensation insurance provides financial support for employees who are injured on the job, and can help to pay for medical expenses, lost wages, and other necessary costs.

conclusion

In conclusion, insurance plays a vital role in providing financial protection and security to individuals and businesses. By spreading out risk and cost over a large pool of individuals, insurance helps to ensure that individuals and businesses are able to cope with unexpected events and continue to function in the face of adversity. Whether you are seeking personal insurance or business insurance, it is important to choose a policy that meets your specific needs and provides the coverage you need in the event of an unexpected loss.





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